And as Max Keiser explains, banking giants Mellon and State Street shaved money off of virtually every pension transaction they handled over the course of decades, stealing collectively billions of dollars from pensions worldwide:

The
signs that he pointed to as indicators of a coming dramatic global
rise in temperatures are the Amazon drought, once a carbon sink the
area is now a major carbon emitter; ocean methane emissions; Siberian
methane vents, which grew in diameter from 30cm in 2010 to 1km in
2011; and arctic defrosting, which occurs when warm Atlantic waters
enter the Arctic.

Mr
McPherson gave two talks in Kerikeri hosted by Deep Green
Productions.

Retired
professor Guy McPherson's view of the living world is fairly blunt.

The
planet has a spurting wound and governments are pumping on its chest
to try and make it stand up again, he says.

"Central
banks and corporations of the world are selling blood for
transfusions and the environmentalists are running around cleaning up
the blood on the sidewalk."

The
former University of Arizona professor of natural resources, ecology
and evolutionary biology is in New Plymouth this week to talk about
how to make living more "durable". His talk will focus on
what he calls the twin sides of the fossil fuel coin: energy decline
and global climate change.

"Global
climate change is on track to cause human extinction," he said.

Dependence
on fossil fuels contributed to environmental decay, water and air
pollution.

"As
a consequence, the set of living arrangements that society has become
accustomed to will be gone, and sooner than we think," he said.

Prof
McPherson left his role as a professor some years ago as his moral
viewpoint began to trump the way he lived.

He
moved off-grid to New Mexico, USA, where he now lives within a
community-based alternative lifestyle.

"It's
a very sparsely inhabited area, with very few humans by design. We're
living outside government influence because governments are not our
friends," he said.

The
majority of people in his community are committed to things such as
growing their own food, which Prof McPherson said was one thing
people could do to become more durable. "There are many things
we can do as individuals and communities to prepare for a different
future than what we've seen in the past.

"We
can secure clean water. We can secure healthy food. We can secure the
means to maintain our body temperature at a safe level, and we can
develop and maintain a decent human community.

"Those
four things are all we need to thrive, not merely survive, but
thrive."

He
said New Zealanders had an incredible chance to take advantage of
sustainable living.

"The
entire southern hemisphere is much better suited to deal with climate
change.

"You
have this maritime climate, and all of this rainfall, and things that
are amazing in terms of the natural world here in New Zealand and New
Plymouth."

Prof
McPherson said his goal is to start a conversation, so people will
take responsibility for themselves and their neighbours.

"And
if we don't have a complete collapse – which is impossible to
imagine in my mind – then we will have just made a better world
regardless. And that's not such a horrible thing."

This
week Max Keiser and co-host, Stacy Herbert, talk about Marie
Antoinette's last words on a banner at the Chicago Board of Trade,
Herman Cain's views on the 'unAmerican' protesters and a proposal for
a Seal Team 6 to protect us from terrorist bankers.

In
the second half of the show, Max Keiser interviews Charles Hugh
Smith, author of An Unconventional Guide to Investing in Troubled
Times, about #occupywallstreet, Crash JP Morgan - Buy Silver and
other solutions to a dangerous banking system.

Japan
has approved the restart of the two reactors at the Kansai Electric
Power Ohi nuclear plant, northwest of Tokyo, despite mass public
opposition.

They
will be the first to come back on line after all reactors were shut
following a massive earthquake and tsunami last March that caused the
worst nuclear crisis since Chernobyl at Tokyo Electric Power's
Daiichi Fukushima plant.

Seismic
modeling by Japan's nuclear regulator did not properly take into
account active fault lines near the Ohi plant, Katsuhiko Ishibashi, a
seismologist at Kobe University, told reporters.

"The
stress tests and new safety guidelines for restarting nuclear power
plants both allow for accidents at plants to occur," Ishibashi
told reporters. "Instead of making standards more strict, they
both represent a severe setback in safety standards."

Experts
advising Japan's nuclear industry had underestimated the seismic
threat, Mitsuhisa Watanabe, a tectonic geomorphology professor at
Toyo University, said at the same news conference.

After
an earthquake in 2007 caused radiation leaks at reactors north of
Tokyo, Ishibashi said Japan was at risk of a nuclear disaster
following a large earthquake, a warning that proved prescient after
Fukushima.

While
it is impossible to predict when earthquakes will happen, Ishibashi
said on Tuesday the magnitude 9 quake last year made it more likely
"devastating" earthquakes would follow.

After
a tough night of wrangling, EU leaders have agreed to set up a new
authority - tasked with keeping sinking banks afloat. And to do that,
the new agency will be given access to Europe's mammoth bailout funds
- stocked in a large part by taxpayer money. This exact function was
previously carried out by governments. But now, the EU can bailout a
nation's banks - without adding to the government's debt levels - at
least on the books. It's something that Germany strongly opposed, but
was forced to relent on due to Spanish and Italian insistence.

Nigel
Farage, a member of the European Parliament and leader of the UK
Independence Party, believes that it's Germany who plays the deciding
role in these talks...

Zombie
markets high on bath salts:

The
benefits of the announcements (lower yields on sovereign bonds and
higher share prices in EU banks) will be short-lived.

None
of these decisions from
the EU summit address
the core issues facing the EU banking system: namely, insolvency and
excessive leverage.

No
one in the EU actually has the money to make these measures work
(again, Spain and Italy will provide 30% of the ESM’s funding).
Markets will stage a knee jerk reaction to these measures.

That
reaction will see bank shares rise and yields fall, temporarily. But
this move will be short-lived, just as moves following LTRO1 and LTRO
2 were.

After
all, these announcements are just more political measures than
anything else.

And
Europe needs capital NOT politics at this point. So I would expect
this rally and the drop in bonds to be short-lived. EU leaders may
have put off the Crisis by a few weeks (or perhaps even a month). But
they still haven’t addressed the core issues causing the Crisis:
excess leverage courtesy of hundreds of billions of Euros’ worth of
garbage debt.

June
30, 2012– CLIMATE –

Forecasters
say back-to-back La Niñas are partly to blame.

These records appear
to be falling into step with a longer-term trend in which record
highs are being set more often than record lows for each decade since
the 1970s – a trend many climate researchers have attributed to
global warming.

As June 2012 draws to a close, it feels more like
mid-July or August to people in wide swaths of the country.

Between
June 27 and June 28, 32 communities stretching from Colorado to
Indiana posted the highest temperatures on record ever for their
locations – with a handful tying or topping records set only a few
days before, according to data kept by the National Climatic Data
Center in Asheville, N.C. Norton Dam, Kan., for instance, recorded an
all-time record of 118 degrees F. on Thursday, two degrees above
Death Valley’s July average.

The 118-degree reading shattered
Norton Dam’s previous record of 113 degrees F. – set just three
days before.

More than 350 sites across a broad swath of the
continent’s interior have posted daily record highs since June 27,
with heat advisories on Friday covering all or parts of 23 states
from Kansas east to the Carolinas and into the Northeast, and from
Wisconsin south to Mississippi and Alabama.

At the same time, other
parts of the country are reporting record lows for this time of year.

Anyone looking for relief might put the Northwest on their itinerary.
Over the same two-day period, 57 locations, largely clustered in
Washington state and northeastern Oregon, posted at least one daily
high temperature that tied or beat the lowest for the date on which
it was measured.

Waterville, Wash., posted the biggest drop among the
group – a high of 51 degrees on Wednesday, nine degrees below the
previous record-low high of 60 degrees on June 27, 1946.

And it’s
all coming out of a spring that was the warmest on record in the US,
bringing a heat wave to the center of the country in March the likes
of which the US hasn’t seen since 1910. Indeed, Spring 2012 in the
US was 2 degrees warmer than the previous record-holder, the spring
of 1910.

One reason for the seemingly relentless high temperatures is
the presence of a broad ridge of high pressure inching its way across
the continent, forecasters say.

With skies generally clear, sunlight
has a clear path to travel on its way to baking what in many places
is an already parched surface. As of Tuesday, a broad swath of the US
was experiencing either severe or extreme drought, according to the
National Drought Mitigation Center, based at the University of
Nebraska in Lincoln.

A
vast clean-up operation got under way on Friday after heavy rain and
storms left thousands of homes without electricity. Many people were
evacuated, with severe disruption on the road and rail networks.

Severe
summer storms have caused flash floods that saw streets submerged.
More than 111,000 lightning strikes were detected across the country,
while hail stones "the size of golf balls'' caused damage in
Leicestershire.

In
Shropshire, a man who died after being caught in heavy flooding was
named on Friday. Mike Ellis, a maths teacher, died after being swept
away by floodwater in a stream at Bittlerley, near Ludlow. A
90-year-old man was among people rescued from vehicles by fire crews
after flash flooding in the Bridgnorth area.Mr Ellis's wife described
him as "a gentle caring man" and the "most wonderful
husband".

More
rain is forecast but not torrential downpours, though there will be
heavy showers – some in flood-hit areas including northern England,
the Midlands, Scotland and Northern Ireland. The Environment Agency
has flood alerts in place in 10 areas of the UK including East
Anglia, the Midlands, the north-eastand the north-west.

Thousands
of homes were left without electricity in the north, with 3,000
customers still without power on Friday yesterday, down from 23,000
on Thursday, according to Northern Powergrid. The worst hit areas
include Consett, Whitley Bay, Prudhoe, Shiremoor and Stanhope.

Northern
Ireland and the Irish republic were also hit by floods, with a loss
of power to more than 10,000 homes in the Cork area and 1,000 in
Northern Ireland. Hundreds of homes and businesses were damaged by
flooding in the Cork suburb of Douglas, while parts of Belfast and
County Antrim were also badly affected.

On
Thursday heavy rains caused landslides which forced the cancellation
of all East Coast trains between Newcastle and Edinburgh, with
limited services resumed by Friday afternoon. Some passengers
travelling from London to Glasgow endured journeys of up to 15 hours.

A
London to Glasgow Virgin Trains service was stranded between two
landslides in the Lake District for more than two hours before being
evacuated near Lockerbie after a fire broke out in the front coach of
the train. In Newcastle, the city's metro was underwater, submerged
cars were left abandoned on flooded streets and care home residents
with learning disabilities had to be evacuated.

On
Friday one of the main railways between Scotland and England was
closed for the second time in 24 hours, with trains unable to run
between Glasgow and Carlisle on the West Coast mainline because of a
problem with overhead wires. The three-day Godiva Festival in
Coventry was cancelled on Friday, with 100,000 revellers told not to
turn up at the city's War Memorial Park to see acts such as Echo and
The Bunnymen and Cast. A statement on the festival website said:
"We're really sorry but finally beaten by devastating weather."

The
cancellation comes after the Isle of Wight festival was hit by
torrential rain last weekend, which saw the site flooded causing
traffic jams around the island.

The
Midlands was hit by intense downpours, with some parts receiving 22mm
of rain in one hour – a third of the average rainfall for the
month. "We are not going to see the type of heavy rainfall we
have seen in the last couple of days, but unfortunately the weather
continues to look quite unsettled," said Sarah Holland from the
Met Office. "It will be mainly dry with some heavy showers, with
the south-east getting the best of the weather while the worst will
hit parts of Wales, the south-west and Yorkshire."

Sunday
is expected to be drier but will remain dull. She added: "As
people go back to work on Monday it will remain unsettled with more
heavy showers expected in Tuesday." Wales has seen the wettest
June since records began, while this is the second wettest June on
record in England. "It has been a disappointing month on all
fronts – with many areas being exceptionally wet, very dull and
cooler than average," said Holland.

(Reuters)
- Scorching heat, high winds and bone-dry conditions are
fueling catastrophic wildfires in the U.S. West that offer
a preview of the kind of disasters that human-caused climate
change could bring, a trio of scientists said on Thursday.

"What
we're seeing is a window into what global warming really
looks like," Princeton University'sMichael Oppenheimer said
during a telephone press briefing. "It looks like heat, it looks
like fires, it looks like this kind of environmental disaster ...
This provides vivid images of what we can expect to see more of in
the future."

In Colorado,
wildfires that have raged for weeks have killed four people,
displaced thousands and destroyed hundreds of homes. Because winter
snowpack was lighter than usual and melted sooner, fire season
started earlier in the U.S. West, with wildfires out of control in
Colorado, Montana and Utah.

The
high temperatures that are helping drive these fires are consistent
with projections by the U.N. Intergovernmental Panel on Climate
Change, which said this kind of extreme heat, with little
cooling overnight, is one kind of damaging impact of global warming.

Others
include more severe storms, floods and droughts, Oppenheimer said.

The
stage was set for these fires when winter snowpack was
lighter than usual, said Steven Running, a forest ecologist at the
University of Montana.

Mountain
snows melted an average of two weeks earlier than normal this year,
Running said. "That just sets us up for a longer, dryer summer.
Then all you need is an ignition source and wind."

"Now
we have a lot of dead trees to burn ... it's not even July yet,"
he said. Trying to stop such blazes driven by high winds is a bit
like to trying to stop a hurricane, Running said: "There is
nothing to stop that kind of holocaust."

Fires
cost about $1 billion or more a year, and exact a toll on human
health, ranging from increased risk of heart, lung and kidney
ailments to post-traumatic stress disorder, said Howard Frumkin, a
public health expert at the University of Washington.

"Wildfire
smoke is like intense air pollution," Frumkin said. "Pollution
levels can reach many times higher than a bad day in Mexico City or
Beijing."

The
elderly, the very young and the ill are most vulnerable to the heat
that adds to wildfire risk, he said. The strain of fleeing homes and
living in communities in the path of a wildfire can trigger ailments
like post-traumatic stress disorder, depression and anxiety.

Commentators
recognise that constant conjecture about recession can become a
self-fulfilling prophecy. However, for most analysts, the objective
is to examine the economic data dispassionately and base predictions
upon a reasonable interpretation of the available evidence.

If
certain data point to a Australian recession, potentially, this in
itself raises important public policy issues:

1.
How well prepared is Canberra for a major downturn in taxation
revenues?

2.
What budgetary scenarios are being modelled by Treasury in the event
of a significant downturn in Australia’s growth?

3.
What strategies does the Commonwealth government have in place to
deal with the impact of a (worst-case scenario) “GFC II”, or a
longer-term global recession followed by a slow, weak recovery? (the
likely scenario).

4.
How does the federal government plan to deal in the longer term with
the emerging “multi-track” economy, characterised by a booming
resources sector (WA and Queensland), a white-collar recession
(scroll down to Macquarie’s
research report on
pages 3–4), a declining and hollowed-out manufacturing sector
(Victoria and South Australia), and a declining
housing market (national).

What
are the key indicators suggesting Australia is destined for
recession? Here’s the case for the prosecution.

Shares

Stock
exchanges are not only a real-time measure of market confidence, but
they also have a delayed-reaction impact upon the real economy. It’s
axiomatic that business investment, private-sector job creation and
the profitability of the retail sector, personal investment incomes
and superannuation industry dividends are ultimately determined by
the relative performance of local and global stock markets.

In
early June, $20 billion was rudely wiped off the Australian stock
market, on the back of another $35 billion lost in August 2011. The
falls continued in September-October, as the ASX200 dipped below 3900
points.

The
fall wasn’t as severe in June, but it was still coming off a 2012
high of over 4400. But it was the
deepest trough since the market collapse of August 2008 and January
2009 – the apex of the GFC.

The
market ebbed and flowed, but recovered for about 18 months from early
2010 until August 2011. Monthly market volumes were reasonably
steady, and the market did not dip below 4400 until August 2011,
losing 5.5% on August 8.

Reality
is about to bite Beijing: China sent a fraction under 20% of its
exports to the EU and the US in 2009. So approximately 40% of all of
China’s exports went to the world’s biggest markets. And that is
mainland China alone.

Factor
in Taiwanese figures (firms like Foxconn and Hon Hai build your
iPhone and iPad in southern Chinese mainland factories, like
Huizhou), plus the entrepôt port known as Hong Kong, and the figures
rise appreciably. (However, hard statistics are difficult to come by,
given the level of intra-Chinese imports and re-exportation.)

But
in 2011, Chinese export unit shipment growth slumped
by 60% year-on-year
in the September quarter of 2011.

The
entire model of the PRC’s economic growth and development is
premised upon export-oriented industrialisation (EOI). Put simply,
this means that the economy is export-geared predominantly to produce
value-added consumer durables at low prices in sufficient volume to
be sold-on in more affluent markets.

But
when those affluent markets deflate rapidly in the wake of
unsustainable debt positions, foreign direct investment (FDI) dries
up, export orders decline significantly, and Chinese firms are
compelled to confront the international politics of surplus capacity.

Surplus
capacity is the problem that two of the most eminent political
economists, Roger Tooze and Susan Strange, analysed in
1981. This book proved to have such longevity, it was republished in
2010, as the problems it studied from the era of stagflation in the
1970s, remain pertinent, eerily, today.

Meanwhile,
China’s central bank has a currency problem. The yuan renminbi
(RMB) retains a crawling peg, meaning it tracks US dollar movements
within a certain band of adjustment. But US borrowing, particularly
since 2008, combined with a “near zero” target range in the US
Fed’s funds rate, has seen the yuan appreciate
slowly by around 7.5% (or
10%, factoring-in inflation), although the RMB remains vastly
undervalued. But every time the US Fed engages in quantitative easing
(QE), yuan appreciation costs China – a lot.

Follow
the money

The
Reserve Bank knows recession is coming. That is why the RBA has cut
official rates by 75 basis points in the last two months, in the hope
of engineering a soft landing. The legacy of Bernie Fraser’s
dithering in 1989-90, while Australia burned to the ground, lingers
long in the memory of Martin Place, the RBA’s HQ.

But
the blunt instrument of monetary policy is an insufficient and
inefficient policy tool to induce adequate demand, investment and
consumption growth in the face of tripartite pressures comprising
Chinese economic slowdown, European austerity and American deficit
reductions.

The
US Fed is reportedly considering QE3 – a third round of
quantitative easing – as a stimulus to the US economy, which
produced weak growth and jobs figures in May, after posting positive
results in the first quarter of 2012.

Over
in Washington, Obama is in a quandary. Another US stimulus could be
damaging politically in an election year, and positive economic
outcomes arising from QE may not be clearly evident by November. For
example, when George H.W. Bush went to the polls in November 1992,
the recessed US economy was already recovering, but the results were
not manifest, and Bush lost. Badly.

Economic
forces beyond our control

What
does all of this mean for Australia? The fact is that Australia’s
economic fate will not be decided in Canberra; it will be determined
in Washington, Beijing and Berlin. The future of car manufacturing in
Victoria and South Australia will be the subject of executive
decisions in Tokyo, Dearborn and Detroit, just as the decision to
close Mitsubishi’s plant in Tonsley Park in 2008 was made in
Stuttgart by Daimler Chrysler.

Mining
tax or not, BHP, Rio and other resources firms are likely to scale
back their investments and output in the short-to-medium term. Even
with major
resource projects in the pipeline, there
are tonnes
of stockpiled iron ore sitting
in Chinese granaries, as warehouses bulge. Copper prices are falling,
and this is never a good sign: copper always has an inverse price
relationship with gold, which is what investors flee to when
stockmarkets plummet.

Even
China runs up against the brick wall of international surplus
capacity. In a global economy characterised by continuous competition
and super-saturated markets (how many flat screens can you really
buy?), not every country can grow at the same time – plain and
simple.

There
are high-growth and low or negative-growth economies; there are
surplus and deficit economies. At present, China and Australia are in
a mutually-complementary growth cycle, while the US, Japan and the EU
(except Germany) are deeply in deficit and in low (US) or negative
(UK) growth cycles.

Do
not believe the snake-oil salespeople (some of whom reside in
Treasury and DFAT), who argue that the Australian economy is delinked
from the US economy; it is not. As the 2008–current GFC proved
beyond reasonable doubt, the global tsunami that emerged from the
wreckage of the US sub-prime mortgage crisis created a ripple effect
that extended far beyond the North Atlantic. Had China not injected 3
trillion yuan into the PRC economy, Australia would have drowned with
the rest of the PIIGS.

There
is No Plan B

Now
is not the time for Canberra to gloat complacently to the rest of the
G20 that its economy is the envy of the world because someone will
have to eat crow, eventually. Certainly, the rest of the world envies
Australia’s abundance of mineral resources and the efficiency with
which it extracts them.

But
the rest of the world does not admire the Dutch disease that afflicts
Australia’s government and business elites, and leaves them in a
state of suspended delusion, transfixed by the belief that the
resources boom can never end.

The
commodities bubble of the late 1970s and early 1980s ended in 1982,
forcing the Hawke government to address the drastic deterioration in
Australia’s terms of trade. Australia’s share of world trade
halved between 1973 and 1983. Hawke and Keating regarded the
Australian dollar float (1983), financial market deregulation (1984),
industrial restructuring (from 1987) and East Asian market
integration (APEC, 1989) as the only means by which Australia could
escape banana republic status.

None
of these initiatives prevented the Australian economy from relapsing
into recession in 1990. Why? Because the global recession – not the
domestically-induced high interest-rate regime – did the damage.
Certainly, domestic monetary policy caused the recession to be longer
and deeper, but, fundamentally, it did not cause the recession; the
complex economic interdependence ingrained in the global financial
system caused it.

What
strategies would the federal ALP government, or prospectively, a
Coalition government, implement in the event of GFC II and a
significant fall in Chinese growth and demand? Neither side of
politics wants to address this thorny issue, as tax cuts and
middle-class welfare dominate a poll-driven agenda and will continue
to do so for the next 12 months.

Foreign
borrowing aside, to which strategies could a Commonwealth government
resort in the event of financial crisis?

We
don’t have the space here to discuss the lunacy of this proposal:
allowing profligate and irresponsible federal governments,
irrespective of their political flavour, to get their hands on the
superannuation cash register?

Keating
clearly isn’t in Kansas anymore. Loading up the banks with
hard-earned pension funds truly is the road to serfdom, as super
funds have scarcely beensuperior
performers of late. Anyone
from the tertiary education sector in the Defined Benefit Scheme will
understand that only too well. Superannuation funds crises are an
accident waiting to happen, but that’s a story for another time.

In
the “dismal science” of economics, there is only one joke and one
joke only: economists have successfully predicted 13 out of the last
2 recessions.

I,
for one, would be perfectly happy to be proved completely wrong on
this occasion.